Earnings call transcript Q4 2022

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Operator

Hello and welcome to the Landmark Bancorp Q4 Earnings Call. My name is Elliott and I'll be coordinating your call today. [Operator Instructions] I now would like to hand over to Michael Scheopner President and CEO. The floor is yours. Please go ahead.

Scheopner. Michael

Michael Scheopner

you results call fourth of fiscal end Thank Landmark's to quarter joining year and earnings operations XXXX. for morning. today our discuss and Good for the

our to Financial Chief of Raymond the company's various me McLanahan. Mark the Officer with and Credit call performance is the aspects Joining of Chief fourth company quarter Herpich, discuss Officer

the statements will Before some of that defined remind our be today Securities Commission. we providing listeners and get forward-looking started, I would guidelines falls the by under information as to we for like Exchange the

of differ As forward or our that that from materially predictions during guidelines, discuss part statements presentation could future, the looking these those out expressed. statements, I must this expectations, of any and point our our beliefs, hopes, results made actual

on SEC. from by be can time factors time filings, and the information obtained XX-K these included or to XX-Q company is our in which contacting the Additional

earnings fourth of the $X.X during Landmark reported net million XXXX. of quarter

ended associated this impact and Mark metrics financial call. will in provide expenses the business had Freedom XXXX on net on especially a which in XXXX. year X, these at XX, the shares, was they financial equity share basis $X.XX. of was was to on the XXXX diluted the return assets bank additional expenses, completed non-recurring for per X.XX%. $X.X return in the The fourth on earnings million resulted with results quarter later October of X.XX%, XXXX earnings acquisition fully related included of December average For significant average the and in on that opening our and The totaled detail

opportunities processing has this Further Freedom integration past of pleased new late XXXX for am that data to for very future operational smoothly I scheduled quarter efficiencies. provide acquisition first gone will quarter. our report integrations the

$XX the $XXX We by of to along acquired compared million income, solid excluding to income third XXXX gross loans and million, the to nearly total quarter the while growth quarter over during fourth quarter. loans Freedom with net bank strong the compared prior net and see loan interest by XX% continue growth interest of increased grew

Credit this continue our low. for loan totaled December well and allowance to strong loan loans us very net liquidity $X.X believe strength markets. to the needs quality financial families practices, quarter non-accrual XX, in offs, remained position The million charge Landmark's losses delinquencies and We continues and XXXX. risk businesses management to meet remain capital of at as

XXnd have declared distributed when the cash record our I'm to quarter, X, done dividend. board the year This that stock of $X.XX XX, report dividend that of our XXXX. XXXX. paid paid cash stock per dividend representing the a During of February fourth and we a has X% for shareholders per company of the we company's since be consecutive XXXX dividend consecutive to March formation of adjusted also share to a the represents XXth share pleased directors X% cash $X.XX in as quarterly dividend

financial the Mark the over who review our turn now will to with results CFO I will call you. Herpich,

Mark Herpich

closing which various already our income. interest And on and Michael. now XXXX to growth bank effective Michael results, like financial X. Thanks, And XXXX solid Freedom significantly to acquisition I'd in were loans net impacted both good fourth the has to with morning October our comprising in everyone. alluded discuss our quarter performance aspects by

of lower October quarter earnings sheet than as million. year the loans onto earnings net of the our quarter the XXXX reminder, a acquisition and XXXX X. $XXX $XXX.X brought and of of fourth of bank As quarter $X.X of third million of income the million balance Net prior of in $X.X deposits million fourth million $X.X Freedom was

the Freedom during with driven were cost the income quarter. net fourth and declines acquisition by These mostly incurred acquisition substantially the

the million for fourth $X.X equity quarter the XX.XX% have our quarter Excluding acquisition costs X.XX% would XXXX adjusted been fourth of million these quarter in acquisition been would for average assets this while adjusted and income and have costs net return respectively. adjusted $X on average

of third The costs a XXXX. acquisition this that $XXX,XXX to strategically a yielding a Also measure of sale results. related in analysis financial provides of that loss comparable these sold of we’ve our exclusion as similar compares lowest which quarter, quarter non-GAAP investments recognized of on $XXX,XXX the loss the quarterly we some more of

growth XX.X%, the the net Freedom as income loan an annualized continued quarter growth our demand of of in the $XX.X acquisition fourth assets margin. rate quarter with interest statement remained continue very as strong. interest million showed excluding increased million loan $XXX income along net our The this Organic increase from to loans or

and interest the both due in net XXXX, and of In of Total interest income on $X.X loans $XX.X also increased increase higher acquisition yields an to to XXXX, X.XX%. on increased growth the rates. interest income and totaled primarily loans this the loan of portfolio quarter million, fourth to compared million but million of securities Freedom balances $X.X bank, ongoing investments the due to third quarter quarter the

investment quarter quarter able quarter investment along in rates current investment yield. rising mortgage of The fourth increased in municipal income longer prior in the were during on third this the increased and securities environment X.XX% of in term X.XX% yield quarter in Interest quarter securities take XXXX of of to fourth million balances due to a on average X.XX% the the and to $XXX,XXX invest growth and quarter the backed compared securities. We with compared the totaled $XX.X advantage to XXXX.

bearing yielding since basis totaling the this have quarter. near XX the low of costs quarter to fourth deposits Interest on growth but of by offset quarter and the $XX.X was remain points interest investments end in XX million XXXX. compared low basis increased points last sale of points XX basis the This quarter

due in bearing $XX.X Interest deposits. quarter from third borrowings to on on higher short quarter expense expense due and to average higher balances. and average increased rates of total in Interest increase the rates interest million $XXX,XXX term this an deposits balances increased

the tax X.XX% as compared a equivalent to portfolio increased fourth in basis X.XX% third the XXXX in Landmark's margin compared quarter. the quarter increased yield equivalent tax quarter this average to X.XX% of net to on on The to X.XX% the loan quarter XXXX. of interest in prior

provision its loans our provision economic as quarter of to And that account the and the the environment of compared based on of value determined analysis bank that for third the were in from the loan was XXXX. we accounted fair of taking losses in no Freedom allowance XXXX into a warranted to acquired quarter fourth for XXX,XXX

the of At $X.X our Non-interest in to loss of million million while loan $XXX,XXX third this by impacted $X.X to sale reserves decreasing investments the loans to year. quarter third in and due on quarter the The was prior in was on XX, compared the loss quarter of ratio quarter, XXXX, loans. our X.XX%. comparison decrease was of mortgage by to the sales declining XXXX lower compared December $XXX,XXX yielding decline also quarter this part last $XXX,XXX gross gains income year totaled the from the securities as to of fourth

to in as continue compared to activity a The housing refinancing strong. mortgage sales loans. mainly interest mortgage coupled prior purchase XXXX to activities is comparison rates Higher was decline non-interest the flow and of on income inventories due to gains million decrease residential and with when in of extremely $X.X year lower

However, normally loan these portfolio we of did we originations see adjustable instead loan and selling. growth rate in are in new mortgages our loans keep of

million in or Freedom than an costs higher $XX Bank, same million $XXX,XXX $X XXXX driven expense third primarily period of of XXXX, as non-interest associated quarter non-interest increase quarter for costs the with quarter. the quarter third the increase million totaled was $X.X compared it to over last Moving to was expense prior The the million acquisition in by over $X.X year. acquisition the third of of and the of the

Increased compensation for were and branch acquired. occupancy the non-interest new expenses and costs primarily Freedom the of we’ve equipment and with other operating cost associated benefits,

tangible increased expense acquisition. deposits core to due amortization with the Additionally, the Freedom in recorded

quarter million related previously the year. quarter tax quarter some to of tax of benefits during XX.X%. the unrecognized loans recorded acquisition Freedom million $X Loan bank $XX.X $XXX acquired the rate of compared This this the of $XXX,XXX as the excluding fourth last million quarter growth a of tax gross to growth loans strong representing and increased in we in continued $XXX,XXX annualized expense quarter in an prior fourth benefit

assumption quarter at of billion $XXX.X December XX $X.X portfolio. Freedom and totaled the from which Deposits resulted by deposit during million million $XXX.X increased of this

increased our deposit to us plenty of ratio still Stockholders’ year to to loan value growth. term loan at totaled December primarily rates. at to per $XX.XX Our the our XX, end decline remains $XXX.X million impacted equity book and and portfolio opportunities in giving investments fund low equity by the XXXX The a losses in was increase interest due share. on unrealized securities intermediate in to decline was and longer which stockholders’ a increased XX%

December of risk The was capitalized. ratio XXXX Our bank's exceed X.X% regulatory leverage bank consolidated capitals well while XX%. XX, are XXXX regulatory very total considered strong ratio the December the XX, levels and and was based as at capital

loan Raymond portfolio to of highlights turn risk call our let the Now and preview to credit me over outlook.

Raymond McLanahan

to increase XX, Mark, December million Gross from loans of totaled an everyone. you, morning $XXX.X $XXX.X outstanding and quarter. of million, previous Thank good XXXX as the

core shares, due of reflected largely but was this bank demand acquisition strong our grew growth this lending products previously, which mentioned As to XX.X% by the quarter. for also Freedom

estate residential, real one-to-four Commercial up experienced real commercial We one to solid $XX.X four million. was $XX.X loan estate, in estate commercial family real up was and growth our portfolios. million. family

construction expanded and up the only Moreover, excited on and and are was Kansas transition Our of markets smooth real our loans Freedom our We our a we portfolios. Kansas. City very estate assimilation the cultures lending growing of team portfolio Metro philosophies are million $XX.X has complementary. commercial remained commercial our were $X.X in not but quarter. across The opportunities and all as million in lending focused similar about up been commercial this Area bank market,

within estate. accruing or credit actively non-accrual real to past loans X.XX% we $XXX,XXX the due primarily decreased to consists sale days all Turning XX, which as of continue gross of loans Total loans pursue than to XXXX. December greater and and quickly real quality $X.X of remain estate the strong. XX portfolio Non-performing foreclosed million Credit totaled foreclosed of quality. loans

management low risk past XX part loans XX Another only quarter. credit efforts as X.XX% between accruing loans The days. is still our due of loan indicator and we interest gross XX remains of due past of this was level that XX days and level the and between monitor of

we numbers, charge very asset fourth maintaining XXXX our strong with quarter metrics. focused improving from you We as compared of quality of remain offs numbers pleased and to $XX,XXX fourth during We're during loan $X,XXX net can recoveries and tell net the these loan of quarter asset recorded on the solid of XXXX. quality

Kansas volumes unemployment that enter increased Sales President still year. Association for even at healthy. we X.X% Labor unemployment fell Kansas, at Kansas this Our to slowed, X.X% as be Kansas a was preliminary of the demand Bureau in the X.X%. to loan commented last landscape current loans. XX.X% Statistics new it will compared have for XX as it rate [indiscernible] in the ended market Realtors ago gross a and The has Realtors looking The lease home December seasonally of to of last remains by reported The in XXXX adjusted prices allowance and rate year. compared seller's losses Kansas December quarter was though X.XX% the same in Association the of year. period Kansas year of to according of Kansas economic

Ag Turning short. our conditions economy. USDA very crop recent rated to persistent conditions The Kansas. remain in report Dry topsoil soil moisture is most

rated wheat some conditions poor. poor Additionally, crop across were state. but to received we Kansas our as in and winter precipitation conditions continue crop We monitor the recently, very

call with I thank the back you. Michael. to And turn that, I'll over

Michael Scheopner

and thank I your Mark want to also earlier for comments. Raymond Thanks,

and as improved associates the executing Before performance solid and with starts daily delivering we we is and strategies, our also our success. want extraordinary and I go on margin. to loan to us pleased our Landmark questions of to a appreciation the Bank. friend summarize credit to our interest focused want net to clients for thanks and strong out everyone are service by leaves at customer my company all carrying our key quality our growth, saying I vision express National a communities XXXX our to our with Their that

questions to call have. With that, might open I'll the that anyone

Operator

Haberman Thank you. First Instructions] Ross from [Operator RLH Investments. from question comes

Your is line open.

Ross Haberman

quickly? multimillion anecdotally, morning, Good how deposit forced are You are you. and dealing you are coming How dollar a quarter just Nice deal? quickly a on Could those guys. how discuss a with or X% you bring who in your you? to depositors money want to you're quarter. to X% And just them better rates? up one raise they're markets and being back and Thank

Michael Scheopner

guess, your that I on mean, Thanks, standpoint the managing interest Ross. the And deposit customers. of I increase for remain a be if strategies our those with commercial a a our those with interest try banking clients an in commercial personal little, company. we interest to pricing have generating we basis. respect the in those the relationship respect retail demands our those on we off retail on pressure, accounts really we little and teams on operating focused appreciate accounts. those are From general for our rate in with are we to accounts continue on to customers the those focus. have Ross, that And for and and relationship just general rates was phrase in competitive. request less do to It a I one manage deposits focus But increases manage core a Both customers.

Ross Haberman

Sorry, continue plan be? see refresh what to is the going us to just next points a follow or XX raise could XX you. think And base you to margin, the rates another and basis do on they pressure assuming accretive over deal months? Thank how of off you're six the Freedom as you up, continued

Michael Scheopner

on margin Yes. want interest to you that? net respect to With the Mark, comment

Mark Herpich

Yes Mike.

got we've to to through well room as renewal up our move I as processes go the interest that the portfolio rates. continue on still like repricing think pressures of impact feel some resetting will us. I and loan we cost our interest

we're up we've been projecting raising accounts. one little indices. a so savings But largely are of costs a cost for So and larger think probably to couple improvements municipal tied that banks the market to quarters and funds and CDs and/or going dealing most with interest net on we're I seeing the been that Ross. been the slow some that depositors out far our more base and We've see interest in here as money are hopeful still margin our off

Michael Scheopner

with at to do Ross respect be modeling, guess looked transaction, Freedom out of gate. I modeling the we the we the that forecast to that accretive as of

efficiencies the scheduled of associated little core acquisition in some bit processing delayed pending a of We are the quarter. conversion this because with late [still] computer

following then the positive-- accretive so earnings our as impact computer And later anticipate incorporate conversion efficiencies be on I ability that recognized that migrate will would some we that into to during additional the and year time.

Ross Haberman

Have how $X so, we base what if are about? specifically specified it be talk just odd accretive and will you some

Michael Scheopner

information we XXXX cut year. you on any a catch per the published are quite question didn't for the public $X bit, mentioned maybe yet We Was haven't information accretive. share any the it -- there. earnings put out out our I just projected on but little what haven't

Ross Haberman

guys. time appreciate luck with get really overwhelmed Thank rates. I Good don't reasons positive you. right. all Okay, in and

Michael Scheopner

Ross. it Appreciate

Ross Haberman

Okay.

Operator

I'll questions. Michael hand no final and remarks. any have back President CEO to further Scheopner, for And We

Michael Scheopner

conference want call. call. at Thank confidence our appreciate for truly everyone you shown quarter that company. results news in forward and our earnings sharing to Thank in I support thank participating and I earnings our next do the to do related XXXX And in your first to look you. I continued you today's you've

Operator

Today's concluded. for call now Thank your is you participation.

lines. your disconnect now may You

Landmark Bancorp (LARK) 1 Feb 232022 Q4 Earnings call transcript